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In re City of New York

Other Lower Courts

January 15, 2008

In the Matter of the Application of the City Of New York, relative to acquiring title in fee simple absolute to certain real property where not heretofore acquired for the same purpose, required as the site for the NEWTOWN CREEK WATER POLLUTION CONTROL PLANT UPGRADE (SECOND TAKING)

Editorial Note:

This case is not published in a printed volume and its disposition appears in a table in the reporter.

COUNSEL

Fred Kolikoff, Assistant Corp. Counsel, City of New York

Michael Rikon, Esq., Joshua Rikon, Esq., Goldstein, Goldstein, Rikon Gottlieb

OPINION

Abraham Gerges, J.

At issue in this condemnation proceeding is the just compensation to be awarded to claimant, Mobil Oil Company (Mobil), for the taking of the subject property, located in Brooklyn (Block 2527, Lot 2) (the Property or the Site). The condemnee, the City of New York (the City), took title on September 19, 1997 (the vesting date). The court viewed the property on May 4, 2005 and this non-jury trial took place on July 26, 27 and December 4, 5, 6, 7 and 8, 2006.

Facts and Procedural Background

The City acquired title to the Property for use as part of the Newtown Creek Water Pollution Control Plant. It is located at the corner of Greenpoint and Kingsland Avenues, is zoned M3-1, has a floor area ratio (FAR) of 2 and is approximately six acres in size. As of the time of vesting, steel petroleum storage tanks were located on the Site; the storage facility had not been operational for some time.

As is also relevant herein, on or about September 19, 2000, the City commenced an action against Mobil under Navigation Law 181(1), claiming that Mobil was strictly liable for the costs and damages resulting from the remediation, cleanup, and removal of petroleum which Mobil discharged onto the property ( City of New York v Mobil, Kings County Sup Ct, Index No. 32613/00) (the Navigation Law Action). By decision dated October 8, 2002, this court granted Mobil's in limine motion for an order excluding evidence at the trial of this action of any diminution in the value of the Property by reason of the remediation costs of the petroleum spill as claimed in the Navigation Law Action and granted the City's cross motion for an order directing Mobil to produce information relating to Home Depot's offer to purchase the Property. The City appealed the decision.

The Appellate Division, Second Department, agreed that evidence of the cost of environmental remediation should be excluded from this trial, but directed that the condemnation award should be held in escrow pending the outcome of the Navigation Law Action, holding that:

"At the condemnation proceeding, the property should be valued as if remediated.' It must be pointed out that valuation of property as if remediated' is not exactly equivalent to valuation of clean' property. As stated by Professor Nichols in his treatise on eminent domain, even after remediation "stigma" may persist, depressing value below "fair market value "' (7A Nichols, Eminent Domain 13B.04 [1]; 9A.07; see Matter of Commerce Holding Corp. v Board of Assessors of Town of Babylon, 88 N.Y.2d 724, 732 [1996], supra; Matter of Allied Corp. v Town of Camillus, 80 N.Y.2d 351, 356 [1992]; Housing Auth. of City of New Brunswick v Suydam Invs., L.L.C., 177 NJ 2, 22 [2003]; SCA Servs. of Ind., Inc. v Thomas, 634 F.Supp. 1355 [1986]). Thus the term as if remediated' takes into account any residual stigma which may attach to real property as a result of the fact that it was previously contaminated."

(12 A.D.3d 77, 84 [2004]) (the Appellate Division Decision).

By order to show cause returnable July 25, 2007, the day before the trial began, claimant moved for an order precluding the introduction of any evidence at the trial of the cost to demolish the petroleum storage tanks and equipment on the Property.

Claimant's Appraisal Report

After inspecting the Property on October 7, 1997 and October 23, 1997, by report dated February 18, 2000, Jerome Haims and Eric Haims of Jerome Haims Realty, Inc. (Haims), values the Property at $42.50 per square foot, or $10,330,000, assuming that the highest and best use was for "big box retail."

This conclusion is premised upon a zoning analysis performed by Mitchel T. Wolfe, whose report states that the Property contains 261,142.2 square feet, or 5.995 acres, based upon a survey by Schneider Engineering and included Wolfe's report; the property has frontage of 484.68 feet on Greenpoint Avenue, 872.85 on North Henry Street and 910.99 feet on Kingsland Avenue. The report further states that to be in compliance with the zoning requirements, any big box retailer is required to have one parking space of at least 18 feet by 6 feet per 300 square feet of gross retail space. Wolfe notes that while Home Depot finds this ratio to be unacceptably low, other stores like Staples, Office Max, etc., find one parking space per 600 square feet of retail space to be acceptable. If a retailer wished to maximize the development potential for the Property, the number of available parking spaces could be increased by constructing a parking deck or, in the alternative, constructing additional parking on an adjacent block, i.e., the lot directly across Greenpoint Avenue, which was also owned by Mobil. Wolfe's report included a drawing designated as SK-1, which places a big box retail store on the Site.

The appraisal report describes the Property as being located in a predominantly industrial area. Transportation to and from the Greenpoint section of Brooklyn is described as fair, with the G, L, J, M and Z subway lines stopping in the area; an exit from the Brooklyn Queens Expressway is five blocks to the south of the site; and the area is accessible by the Kosciusko, Pulaski and J.J. Byrne Memorial Bridges. The site itself was improved with 17 fuel and gasoline storage tanks, ranging in size from 93 feet in diameter and 40 feet in height to 30 feet in diameter and 30 feet in height.

In reliance upon six comparable sales, Haims values the Property at $11,098,544. He then subtracts $765,000 as the cost of demolishing the existing storage tanks and other structures and bringing it up to the necessary grade. This cost is premised upon a report prepared by Martin M. Gross and Ralph Bradford of Martin Gross Associates, who assumed that the cost of demolishing the storage tanks would be offset by the salvage cost of the metal, which would result in no cost for the demolition work. Gross and Bradford were also of the opinion that the existing perimeter wall that surrounded the Property would not be demolished, but that it would be necessary to place controlled fill beneath the building.

Claimant's Comparable Sales

In valuing the Property, Haims used comparable sales in both Brooklyn and Queens because he believed that it was important to use sites that were large enough to accommodate a big box retail store.

Comparable sale number 1 was vacant property purchased by Home Depot and located on Northern Boulevard in Long Island City, one mile from the Property (Home Depot - LIC). It was zoned M1-1 and had a FAR of 1 and a developable area of 403,931 square feet. It sold for $49.51 per square foot on October 1, 1997, 15 days after title to the Property vested. Haims adjusted this sale down for location (-20%) and size (-10%) and up for zoning (k10%) and access (k10%), for an adjusted value of $44.56 per square foot

Comparable sale number 2, located on Woodhaven Boulevard in Glendale, Queens, was also purchased by Home Depot (Home Depot - Glendale). It was zoned M1-1, had a FAR of 1, was improved with a 100,000 square foot warehouse that had to be demolished and had a developable area of 200,900 square feet. It sold on July 17, 1997 for $45.55 per square feet. Haims adjusted the property up for size (k5%), access (k10%) and zoning (k10%); Haims then deducted demolition costs of $4.98 per square foot, for an adjusted value of $61.91 per square foot. By Notice of Comparable Sale dated October 30, 2001, claimant served an addendum to Haims' report, stating that Home Depot purchased an additional lot on September 29, 1999, for a total land area of 423,925 square feet. Thus, the correct unadjusted price per square foot for this sale is $59.33.

Comparable sale number 3 is another large, vacant industrial site, located on Hamilton Avenue in Brooklyn, that was purchased by Home Depot (Home Depot - Hamilton Avenue). It was zoned M3-1 and had a FAR of 2 and a developable area of 603,540 square feet; it is the City's comparable sale number 3. It sold for $24.38 on March 27, 1997. Haims adjusted the property down for location (-5%) and up for access (k10%), for an adjusted value of $25.60 per square foot. Also significant with regard to this sale is the fact that Home Depot constructed a parking deck to increase the amount of parking available.

Comparable sale number 4 was formerly a 360,000 square foot, three story bakery located at 13-122 Avery Avenue in Flushing, near the Flushing River, that was also purchased by Home Depot in two separate conveyances (Home Depot - Flushing). It was zoned M1-2, had a FAR of 2 and a developable area of 740,520 square feet and sold for $37.81 per square foot. It had a contract date of December 12, 1992, but the sale did not close until February 8, 1994 because Home Depot had to obtain the variances needed to provide adequate road access. Haims adjusted this property down for size (-10%) and up for access (k10) and zoning (k5%). Haims then deducted demolition costs of $9.72 per square foot, for an adjusted value of $49.42 per square foot.

Comparable sale number 5, located on Metropolitan Avenue in Middle Village, Queens, was purchased by Forest City Ratner in two separate transactions for development as a multiplex theater. It was zoned M1-1, had a FAR of 1, a developable area of 360,978 square feet and was improved with a 90,000 square foot industrial building that had to be demolished. It sold for $22.72 on April 25, 1997. Haims adjusted the property down for size (-10%) and up for access (k10) and zoning (k10). Haims then deducted demolition costs of $2.49 per square foot, for an adjusted value of $27.48 per square foot.

Comparable sale number 6 was vacant land located at 970 Third Avenue in Sunset Park, Brooklyn, was formerly a pipe supply facility and was developed as a Costco store (Costco); it is the City's comparable sale number 1. It was zoned M1-2 and had a FAR of 2 and a developable area of 558,574 square feet. It sold for $29.72 per square foot on January 16, 1996. Haims adjusted the sales price down for location (-5%) and up for zoning (k5%), for a total adjusted sales price of $29.72 per square foot.

Valuation

In reviewing these sales, Haims notes that the average price per square foot was $39.78 and the median was $37.14. In valuing the Property, Haims considered all of the sales, but relied principally upon the most recent sales to Home Depot, for an adjusted sales price of $42.50 per square foot.

The City's Appraisal Report

After inspecting the Site on November 17, 1997, May 20, 1998 and August 15, 1998, by report dated April 24, 2006, Doris Silber of Jacques O. Tuchler Associates (Silber) values the property at $24.00 per square foot, or $3,625,000. Silber values the Property assuming that the highest and best use is for open storage of building materials, such as lumber, stone or gravel, or for parking vehicles, because that was how similarly zoned property in the vicinity was used.

In her report, Silber describes the Property as having 261,067 square feet, with frontage of 484.68 feet on Greenpoint Avenue, 259.70 on the west side of Kingsland Avenue, 652.29 feet on the southwest side of Kingsland Avenue and 872.85 on the east side of North Henry Street. She further notes that the Site was improved with 10 steel oil storage tanks, although the storage facility ceased operations in 1995. Silber also states that a report prepared for the New York City Department of Environmental Protection in February 1997 indicates contamination in both the soil and groundwater, that Mobil entered into consent orders with the New York City Department of Environmental Protection and New York State Department of Environmental Conservation, that conventional lenders would not finance acquisition of contaminated sites and that the typical buyer would require remediation or indemnification from the seller. Pursuant to the Appellate Division Decision, as quoted above, however, Silber did not consider the costs of environmental remediation in the valuation of the property.

In reaching her valuation, Silber relies upon a report prepared by Joseph Wallwork of Greyhawk North American (Wallwork) to subtract demolition costs of $2,641,162. In his report, Wallwork notes that the City actually paid $5,103,007.43 for the demolition work performed at the Site, which also included property owned by Exxon and Williamsburg Steel. To determine the cost of that portion of the work performed on the Site owned by Mobil, Wallwork distributed the costs across the three sites as apportioned by the City's contractor. Wallwork further estimates that the total cost to bring the Site to contract elevation, i.e., to raise the elevation .47 feet as indicated by the City's contract, would require 14,891.24 cubic feet of fill, for a cost $3,434,587, exclusive of salvage value; to raise the elevation to the adjacent street level, or 2.51 feet, would require 34,658.99 cubic feet of fill and would cost $4,369,387, exclusive of salvage value; to raise the elevation as specified by Bradford and Gross, which was unspecified, would require 38,022 cubic yards of fill. Wallwork further estimates that the value of the salvaged steel would be $60 per ton, or $77,000, if the salvage yard picked up the scrap metal, and $83 per ton, or $106,000, if the steel was delivered to the salvage yard. Hence, the total estimated cost of Site preparation was $3,332,100, after deducting the salvage value of the steel. After deducting those costs that would not be incurred by Mobil if it preformed the work itself, Wallwork estimates that the cost of the work would be $2,641,162.38. Wallwork further estimates that the cost of constructing a parking deck on piles, due to the high water table, would be $2,006,100. In addition, the fill necessary to construct a slab on grade foundation was estimated to cost $1,385,200, and a foundation including piles would cost $3,069,000, for an increase of cost of $1,683,800. When these costs are added to the cost of demolition, if performed by Mobil, or $2,641,162, and the cost of raising the grade, $934,800, demolition and Site preparation costs total $7,265,862.

Comparable Sales

In valuing the Property, the City relies upon four comparable sales, all located in Brooklyn. Comparable sale number 1, Costco, is claimant's comparable sale number 6. It was zoned M1-2, had a FAR of 2, a land area of 277,772 square feet and sold for $29.88 per square foot on January 16, 1996. Silber adjusted this sale up for time (20 months at 5% per year), or to $32.37 per square foot; down for location (-10) and because it was in a superior flood area (-10%); and up for zoning (k5%), for a total net adjustment of -15%, for an adjusted value of $27.51 per square foot.

Comparable sale number 2 was located at 6128 8th Avenue in Sunset Park that was purchased by the former lessee/owner of adjacent property to provide needed parking. It was zoned M1-1 and had land area of 158, 311 square feet. It sold for $22.74 per square foot on May 30, 1996. Silber adjusted this sale up for time (16 months at 5% per year), or to $24.26 per square foot; up for frontage (k10%) and zoning (k5%); and down because it was in a superior flood area (-10%), for a total net adjustment of k5%, for an adjusted value of $22.92 per square foot.

Comparable sale number 3, Home Depot - Hamilton Avenue, is claimant's comparable sale number 3. It was zoned M3-1, had land area of 301,770 square feet and sold for $24.38 per square foot on March 27, 1997. Silber adjusted this sale up for time (6 months at 5%), or to $24.99; down for location (-10%) and because it was located in a superior flood zone (-5%); and up for frontage (k15%), for a total net adjustment of 0, for an adjusted value of $24.99 per square foot.

Comparable sale number 4 was located at 222 Morgan Avenue in English Kills, was improved with a 8,400 square foot warehouse and was purchased for use as a refuse transfer station. It was zoned M3-1 and had land area of 180,70 square feet. It sold for $17.10 per square foot on September 5, 1997. Silber made no adjustment for time and adjusted up for location (k5) and frontage (k15%), for a total net adjustment of k20%, for an adjusted value of $20.52 per square foot.

Valuation

In reviewing these sales, Silber notes that the mean price per square foot was $23.99 and that the median was $23.96 and values the Property at $24.00 per square foot.

The Trial Testimony

Mitchel T. Wolfe

Wolfe, an architect and trade fixture appraiser, testified on behalf of claimant that he visited the Property on several occasions. He ascertained that it was zoned M3-1, which allows heavy industrial uses, for the purpose of determining what could be built on the site, i.e., whether it was feasible to develop a big box retail operation, such as Home Depot, Lowes, Staples or Pergament. Accordingly, Wolfe prepared SK-1, which places a big box retail store on the Site, which has 121,019.29 square feet and 408 parking spaces, 18 by 8 feet in size, a use of the Property permitted as of right on the date of vesting. In order to increase the size of the building, the number of parking spaces would have to be increased, which could be done by acquiring an additional parcel of land or by building a parking deck, an alternative actually employed by Home Depot at other sites that it developed.

On cross examination, Wolfe testified that he observed other building supply stores in the area; he did not observe any big box retail stores. Any structure built on the Site would have to be constructed on engineered compacted fill or on piles.

Jerome Haims

Haims testified that he inspected the Site on October 7 and 23, 1997, when he observed an abandoned fuel storage facility owned by Mobil. He believed that there were 17 tanks that were 90 feet in diameter, some tanks that were 30 feet in diameter and piping connecting them.

Haims opined that one of the most important elements of an appraisal is the highest and best use of the property, which was for use as a big box retail store, more particularly, as a Home Depot store. This conclusion was based, in part, upon his conversation with Home Depot's regional real estate manager and his review of recent acquisitions which he viewed as comparable. In so concluding, Haims also noted that as of the date of acquisition, Home Depot had only had one location in Brooklyn and was looking for ten. Moreover, Home Depot was looking to lease or purchase property adjoining that owned by Mobil. Further, at that time, the location would be the closest to Manhattan. In this regard, when claimant learned of Home Depot's interest in the Site, it cross-moved, in limine, to obtain discovery with regard to the purchase, which motion was granted, as noted above. In addition, as of the date of vesting, Haims was of the opinion that there was only a slight demand for industrial property.

Haims further testified that it was the policy of the City to use old industrial sites for big box retail stores because such development would generate jobs and real estate taxes. Since Home Depot was a "destination store," one would go to the store by automobile or truck; it was therefore not necessary to have immediate access to mass transportation. Instead, what was important was that the Site had extensive frontage on Greenpoint Avenue and access to a major thoroughfare that could be used to go anywhere in Brooklyn or Queens via the Brooklyn Queens Expressway or the Long Island Expressway.

In discussing the comparable sales that he relied upon, Haims briefly summarized the findings set forth in his report, adding that he chose comparable sale number 1, Home Depot - Flushing, because it was located approximately a mile from the Site and was zoned M1-1. The property was originally intended to be used as a K-Mart, but was instead sold to Home Depot in October 1997, within a month of the vesting of title of the subject Property. No demolition was necessary because the property was vacant and cleared. Haims adjusted this sale down 20% because Northern Boulevard was a superior location to the Site; down 10% because it was larger, almost 10 acres, and accordingly had more flexibility in design; up 10% because it had better street access than did this comparable sale; and up 10% because it had more favorable zoning, for a total adjusted price of $44.56 per square foot.

Haims explained that comparable sale number 2, Home Depot - Glendale, was approximately four miles from the Site. Following the completion of his report, additional lots were purchased in September 1999, so that the purchase price totaled $25,150,000, or $59.33 per square foot. Haims explained that he included this assemblage to demonstrate that values for big box stores were increasing.

Comparable sale number 3, Home Depot - Hamilton Avenue, was similarly a large industrial site and was adjacent to the Gowanus Expressway; a 120,000 square foot store and a parking deck was erected on the property. Haims testified that the cost of a deck is not a detriment to the land, but is instead a design consideration.

Comparable sale number 4, Home Depot - Flushing, was formerly occupied by the Tasty Baking Company on Avery Avenue, near the Flushing River, in Queens, and was located in a flood zone. Based upon his personal knowledge, Haims knew that the site had soil problems, was sinking and flooded. This property was sold in 1992, but the sale did not close until 1994 because Home Depot needed to obtain variances to provide road access.

Comparable sale number 5 was developed into a mutiplex theater. In valuing the Property, Haims gave this sale the least weight because it was sold by a trustee. Comparable sale number 6, Costco, was located in the Bush Terminal, an industrial park.

After considering the maximum selling price of $61.91, the minimum selling price of $25.60, the average of $39.78 and the median of $37.14, Haims valued the Property at $42.50 per square foot, for a total value of $11,098,544. He then the subtracted the cost of demolition and fill, or $765,000, as determined by Gross and Bradford, for a total value of $10,330,000.

On cross examination, Haims testified that when he inspected the Property on October 7, 1997 and on May 4, 2005 with the court, he did not observe any big box retail stores in the immediate area. When Haims returned to the area approximately two months before he testified, he observed four or five big box retail stores within one-quarter mile of the Site.

Haims also noted that sale number 1 was located in a "coming retail area." Comparable sales number 2 and 5, which were closest to the Site after comparable sale number 1, were over four miles away. Comparable sale number 2 was located in a low-rise commercial and residential area. The uses of the property surrounding comparable sale number 5 were low-rise retail, industrial and residential. Comparable sale number 4 was located approximately six miles from the Site, a 15 to 20 minute drive; the Home Depot that was built there is visible from the Van Wyck Expressway, in an area with small neighborhood stores. The sign for the Home Depot constructed on comparable sale number 3 was visible from the Gowanus Expressway. Haims believed that a parking deck was added there to increase both visibility and the amount of parking.

On redirect examination, Haims testified that if a sewer plant had not been constructed at the Site, it would be a totally different neighborhood. Haims estimated that the size of the plant built there was ten times the size of the plant that existed before the condemnation.

Ralph Bradford

Bradford testified that he is a construction engineer; he had been employed by Chevron Oil and was responsible for building, maintaining and operating a tank system within a refinery, which was connected to a wharf in the San Francisco Bay. He was also employed by Richfield Oil Corporation, responsible for the construction of service stations and the bulk plant terminals in northern California; he was then responsible for the acquisition of real estate and later became an appraiser. In addition, Bradford prepared a replacement cost estimate after Hurricane Hugo hit St. Croix and decimated its oil refinery and a cost analysis for the Taj Mahal in Atlantic City. He and Gross were retained to estimate the cost of clearing the Site and bringing it up to the grade established by Wolfe for development with a building. He inspected the Property in September 1997, when he and Gross also took pictures of the site.

Bradford further testified that he researched the cost of removing the oil tanks by talking with Tom Berenz of Costello Dismantling Company and by reviewing a video tape of the equipment used in the process. The existing oil storage tanks would be taken down by using hydraulic shears to cut them up in a way that they implode from the middle, so that they could be transported to a salvage yard. His research revealed that the salvage value of the steel would be $110 a ton. He accordingly concluded there would be no cost for demolition, since a salvage company would have under taken the dismantling for the salvage value. In his report, Bradford stated that Berenz told him that the "break even" point for the value of scrap metal versus the cost of demolition and delivering it to the scrap buyer occurs when scrap metal buyers are paying in the range of $70 to $80 per ton. As of the date of vesting, the scrap metal value of steel ranged from approximately $100 to $110 per ton; the existing scrap metal items at the Site weighed approximately 2,500 to 3,000 tons. Hence, the difference between the cost of removal and the value of the scrap metal indicates an anticipated profit of approximately $30 per ton, or $90,000, which would have been sufficient to attract a demolition contractor.

After adding the cost of the fill needed to bring the Site up to the grade specified by Wolfe, Bradford opined that the Site preparation cost would be $765,000.

On cross examination, Bradford testified that Mobil represented that the tanks would be clean and empty at the time of demolition; he did not believe that the tanks had been cleaned as of the date of vesting. Bradford did not know the cost to purchase or rent the equipment that would be needed to demolish the tanks, how many hours the work would take, the cost of the labor, the number of truckloads of material that would be removed or where the demolished material would be taken, since the contractor would be responsible.

Arline E. Vogel

Vogel, who testified on behalf of condemnor, stated that she was employed as the principal and chief financial officer of Mosbacher Property Group, the owner, developer and manager of retail property; her responsibilities include involvement in site acquisition, site reports, financing, negotiating and leasing. Vogel testified that she managed four big box properties, which she defined as having 20,000 to 30,000 square feet or more. Mosbacher owns an Urban Outfitters and she was "involved" with Circuit City, Saks Off Fifth and a number of movie theaters. She and her colleagues analyzed sites as though they were considering purchasing and leasing them for use as big box retail stores.

After looking at the Property, Vogel concluded that it could not be used as a big box retail store. She testified that the Site was not suitable in that it fronted on Greenpoint Avenue, which is essentially an industrial road that would be "uncomfortable for passenger traffic;" in addition, the road is often in poor repair. Further, the Site is not located in what is perceived as a retail area, there is no pedestrian traffic, there is no residential neighborhood from which to draw customers in the immediate area, there is insufficient parking, a sewer plant is not an ideal neighbor, the site would require extensive environmental remediation because lenders would not want to get involved with properties having such issues, and there is no access by mass transit. In this regard, Vogel testified that the nearest subway stop is one-half mile away, on the G line, which does not go into Manhattan. In additional, there is only limited access by bus, with buses running only every half hour during the weekend. The Site also has limited visibility and problematic access from the Brooklyn-Queens Expressway and the Long Island Expressway, the two major thoroughfares closest to the Site; big box retail store customers look for immediate access from main roads.

In her report, Vogel notes that the exclusive real estate broker for Costco advised her that Costco would not be interested in a site that did not have easy ingress and egress. Similarly, the real estate broker for Staples advised her that when Staples makes a choice about where to place a store, it takes into account "psycho-graphic" barriers, such as the unattractiveness of the area and uncomfortable driving conditions. In addition, the Site provides inadequate parking, since Staples requires one parking space for every 200 square feet of store, while Costco looks for one parking space for every 155 square feet.

Vogel also opined that the comparable sales relied upon by Haims were more desirable for a big box retail store than is the Site. In this regard, comparable sale number 3, Home Depot - Hamilton Avenue, is more visible from the highway and a subway station is located two blocks away. Comparable sale number 1, Home Depot - Flushing, is located in a prime big box retail area, among several other big box retail stores. Comparable sale number 6, Costco, has superb visibility and is near a residential area. Comparable sale number 4, Home Depot - Flushing, has superior visibility in that it is directly visible from the Van Wyck Expressway and it is perceived as a retail destination. All of the comparable sales are located in areas having greater population density.

On cross examination, Vogel testified that of the four big box retailers that she had experience with, one was a grocery store located in Dutchess County. The second was a site in Pittsburgh, Pennsylvania that the company had under option; although the company was talking to Circuit City, Toys R Us and other similar retailers, the property was ultimately sold without being developed for use as big box retailer. The third is a 50,000 square foot site on 14th Street in Manhattan, which has one tenant, Urban Outfitters, which leases a 26,500 square foot retail store and 2,000 square feet of storage space. The fourth is a 32,000 square foot grocery store located in Philadelphia, which is adjacent to other big box centers.

Vogel believed that the Site could be developed as a Home Depot, Lowes or Staples of right. She did not visit the Site as of the date of vesting. After learning that Home Depot was interested in a site located at Kingsland Avenue and Clayer Street, Vogel did not change her opinion that the that Site was not desirable for use as a big box retailer. She further testified that she did not believe that Home Depot's option for that site was "serious;" she believed that is was a "paper site," i.e., an offer made to tie up the property. She did not believe that Home Depot saw the site when they executed the option and once they did, they were no longer interested.

Vogel acknowledged that big box retailers often build in areas that were industrial at one time. She was familiar with a "destination store," which she described as one to which customers will go, regardless of its location, because they want the goods or services. She agreed that Home Depot is a destination store. Although Vogel did not believe that a sewage plant was an attractive neighbor, she did not notice any smell when she visited the Site.

On redirect, Vogel testified that even if Home Depot was characterized as a "destination store," or "a place that someone might go to," but "not an impulse stop," it does not mean that shoppers would go to the location, or return to it, if the trip was too difficult. Gary Becker

Becker, a civil engineer, employed by Henderson and Bodwell, LLP, the firm that prepared a report to rebut Wolfe's findings, testified on behalf of the City that he was involved in the design of two Home Depot stores, one in Valley Stream and one in Shirley. Becker opined that the plan depicted on SK-1 would not be acceptable to any big box retailer. More specifically, he testified that he believed that Home Depot would not find the orientation of the entrance, i.e., away from Kingsland Avenue, to be acceptable; that the width of the fire lanes is inadequate; that the store, as constructed pursuant to the sketch, would be below the flood plain and would require additional fill to raise the level; and that the building constructed at the Site would need a pile foundation, which was used when the Home Depot - Hamilton Avenue was constructed, because of the soil type. Becker also testified that that the number of parking spaces that could be provided is inadequate and that it would be impracticable to build another parking lot across the street. In his report, Becker notes that in constructing Home Depot - Hamilton Avenue, an additional 147 parking spaces that it shared with the adjacent Jetro food wholesaler were constructed and that Home Depot - Glendale is adjacent to The Sports Authority, which similarly offers additional parking.

On cross examination, Becker stated that he did not ascertain the requirements for a fire lane that were in effect as of the date of vesting and he did not attempt to contact Home Depot to determine if the orientation of the entrance would be acceptable. He further stated that although Home Depot may desire to have more parking spaces, the number of spaces that could be constructed was in accordance with the zoning requirements. Further, other big box retailers, such as Lowe's or Comp USA, required less parking than did Home Depot. On redirect, Becker testified that when ...


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